Shares in wireless technology firm Laird PLC (LON:LRD) halved as the smartphone components supplier issued a profit warning.
The stock plunged to 153.1p from last night’s close of 308.5p before recovering a little to around 170p after warning that an expected upturn in the third quarter, after a disappointing first half, had failed to materialise on time while it was also experiencing pricing pressure.
Full-year profit expectations have been slashed to around £50mln, versus market expectations of £73.6mln.
Reaching for a well-thumbed management strategy guide, the company has moved into cost control and cash conservation mode. In an attempt to reassure the market, it said net debt at the end of the financial year is expected to be less than 3.5 times underlying earnings (EBITDA), which means it is on course to stay within its banking covenant limits.
Revenue in sterling for the third quarter increased by 29% to £207mln from £160mln the year before, but was down 4% year-on-year on an organic, constant currency basis.
The Wireless Systems’ division’s revenue was down an underlying 3%, while the troublesome Performance Materials division’s revenue was down 5% on an underlying basis.
"We are very disappointed by these adverse developments in the mobile devices market for our Performance Materials division, at a time when other parts of the business continue to perform well. We are confident that the actions we have taken will stabilise and improve the business,” said Tony Quinlan, Laird’s chief executive.
“Moving into 2017, the work to improve our operating model is progressing well and we are on track to deliver the associated significant financial benefits. This, together with the Novero turnaround, as well as the positive momentum in our automotive business, will improve performance next year and beyond," he added.